Oil and Gas IFRS and Treasury Training Course: Hedge Accounting, Liquidity and Price Risk

Programme Summary

Oil and gas IFRS and treasury is the subject of this one-week training course for finance directors, controllers, treasury managers and risk leads, ending in a reporting and treasury risk pack for one entity. Energy companies report long-lived assets and obligations while funding them against volatile prices, currencies and rates, yet reporting and treasury teams often hold separate views of one exposure. The programme moves from the shared exposure picture to upstream reporting, market risk, hedge accounting and disclosure, applied to an entity the participant selects. Mars Training Centre UK delivers this programme on oil and gas IFRS and treasury to mixed-organisation cohorts.

The Business Case

Energy companies commit capital years before revenue arrives, and prices and currencies they do not control set that revenue. When hedges are agreed without the reporting consequence in view, earnings swing for reasons boards cannot explain. Teams that share one exposure map, one hedge file and one disclosure draft can answer lenders, partners and auditors from the same evidence.

• Earnings Volatility: Falls as hedge relationships are designated and documented before trades are made.
• Funding Surprises: Fall as liquidity forecasts follow the same assumptions as reported balances.
• Audit Queries: Fall as disclosures draw on one controlled exposure record.

Principles and Evidence Base

• IFRS 6 Exploration for and Evaluation of Mineral Resources: Frames the exploration asset and impairment review applied in Session 2.
• IFRS 9 Financial Instruments: Supplies the hedge accounting model used to designate and test hedges in Session 4.
• IFRS 7 Financial Instruments Disclosures: Shapes the risk disclosure draft built in Session 4.
• IAS 21 The Effects of Changes in Foreign Exchange Rates: Guides the currency translation checks made in Session 3.

Intended Participants

• Finance directors who approve treasury policy and sign off the financial statements.
• Financial controllers who prepare the reporting of assets, provisions and instruments.
• Treasury managers who forecast cash and execute hedging decisions.
• Risk managers who measure price, currency and counterparty exposure.

Typical functions include upstream operators, national oil companies and oilfield services.

Learning Outcomes

1. Participants will be able to construct an exposure inventory that links treasury positions to reported balances.
2. Participants will be able to evaluate exploration assets, impairment indicators and decommissioning provisions.
3. Participants will be able to prioritise price, currency and interest exposures for hedging.
4. Participants will be able to diagnose weaknesses in hedge documentation and effectiveness tests.
5. Participants will be able to justify a treasury policy and hedge design to a board committee.
6. Participants will be able to prepare risk disclosures that match the underlying exposure record.

Programme Structure

Day 1: Oil and Gas IFRS and Treasury Foundations

Where do reported numbers and treasury positions describe the same exposure?

• Energy Financial Statement Map
• Exposure Inventory Sheet
• Treasury Policy Outline
• Liquidity Forecast Structure
• Reporting and Treasury Linkage Chart

Day 2: Reporting Upstream Assets and Obligations

How are exploration assets, impairment and decommissioning shown in the statements?

• IFRS 6 Exploration Asset Treatment
• Impairment Indicator Review
• Decommissioning Provision Rollforward
• Joint Arrangement Balance Review
• Revenue Recognition Check

Day 3: Price, Currency and Interest Exposure

Which market exposures matter most, and who is on the other side of the trade?

• Price Exposure Map
• IAS 21 Translation Check
• Interest Rate Gap Schedule
• Counterparty Limit Table
• Hedging Instrument Comparison

Day 4: Hedge Accounting and Disclosure

How is a hedge designated, tested and explained to readers of the statements?

• IFRS 9 Hedge Designation File
• Hedge Effectiveness Assessment
• Hedge Documentation Template
• Cash Flow Hedge Reserve Rollforward
• IFRS 7 Risk Disclosure Draft

Day 5: Reporting and Treasury Risk Pack for One Entity

Do the exposure record, the hedge design and the disclosures agree for one entity?

• Applying the Session 1 Liquidity Forecast Structure
• Testing the Session 3 Price Exposure Map
• Reviewing the Session 4 Hedge Designation File
• Checking the Session 2 Decommissioning Provision Rollforward
• Completing the Reporting and Treasury Risk Pack

Methodology

The programme uses a structured exercise method built on a shared case of an upstream producer with dollar revenue, local currency costs, a decommissioning obligation and a bank facility. Participants build each artefact on the case, then on their own entity, with written facilitator feedback in each session.

• Suggested activity: Mapping every price and currency exposure in the case to a statement line.
• Suggested activity: Drafting a hedge designation file and testing its effectiveness.
• Suggested activity: Presenting a treasury policy outline to a mock board committee.

Capstone Output

Each participant completes a reporting and treasury risk pack for one entity. It holds an exposure inventory, a liquidity forecast structure, a hedge designation file, a counterparty limit table and a draft risk disclosure. The pack is used at work to align reporting and treasury teams, open the next hedging discussion and brief auditors and lenders.

Frequently Asked Questions

Is oil and gas IFRS and treasury training suitable for finance managers new to hedging?

Yes. Oil and gas IFRS and treasury is taught through cases and templates, assuming experience in reporting, treasury or audit but no earlier work with derivatives.

Which standards does oil and gas IFRS and treasury training rest on?

Oil and gas IFRS and treasury training rests on IFRS 6 for exploration assets, IFRS 9 for hedge accounting, IFRS 7 for risk disclosure and IAS 21 for currency translation.

How is the pack from oil and gas IFRS and treasury training used at work?

You use the reporting and treasury risk pack to align reporting and treasury teams, plan the next hedging decision and brief auditors and lenders.

How does oil and gas IFRS and treasury differ from general financial reporting training?

Oil and gas IFRS and treasury links upstream balances to price, currency and funding risk, while general financial reporting training covers recognition and presentation across all industries.